Intel has raised $20 billion through an expanded share placement aimed at financing its costly expansion of contract microchip production, Reuters reports.
According to the agency, Intel, once a leader in the global microchip market, continues to actively invest in the development of new production capacities and advanced chip packaging technologies, trying to compete with leaders in contract manufacturing, including TSMC.
Reuters reports that Intel set the placement price at $95 per share, which is 2.6% lower than the closing price of the previous trading day. On Monday, the chipmaker announced plans to raise $15 billion through the placement.
The article notes that since the beginning of the year, Intel's stock price has nearly tripled, outperforming AMD and Nvidia, as well as the nearly 75% rise in the Philadelphia semiconductor index. Several analysts interviewed by Reuters noted that the sharp increase in Intel's stock price has increased the likelihood of raising additional equity to finance the company's expansion plans.
“Intel, as a capital-intensive business that has significantly weakened its balance sheet and worsened its growth prospects by focusing on financial engineering rather than production, including spending $82 billion on stock buybacks in the 2010s, has sufficient grounds to attract new capital, especially after its stock price has quintupled since last August,” said AJ Bell's investment director, Russ Mould, to Reuters.
The article also mentions that the expansion of the use of artificial intelligence (AI) agents has contributed to the increase in demand for central processing units (CPUs), which has exceeded Intel's production capabilities. Therefore, according to Reuters, in July the company raised its capital expenditure forecast for the current year from $18 billion to $20 billion.
